What happens when emissions can’t be avoided

02/12/2025

A new value chain is taking shape

Net zero isn’t just about cutting emissions, it’s also about what we do with what’s left. Carbon abatement and removal are moving from the sidelines to the spotlight, as hard-to-abate sectors search for credible ways to neutralize residual emissions.

From carbon capture and storage to nature-based removals and bio-based materials, a new value chain is taking shape. But costs, policy gaps, and infrastructure delays are slowing momentum. Without scaled investment and robust governance, climate goals will remain out of reach.

Abatement refers to all measures that reduce residual emissions, including carbon capture, carbon dioxide removal (CDR), and fossil-free material substitutions.

It plays a critical role in addressing emissions from hard-to-abate sectors and compensating for legacy emissions, complementing direct avoidance strategies.

Key solutions include carbon capture, utilization and storage (CCUS) in process industries, nature-based removals, and emerging CDR technologies. Potential revenue streams include EU Emissions Trading System (ETS) savings, voluntary carbon markets, and CO₂ utilization. Bio-based alternatives, such as wood-based chemicals, packaging, and construction materials, are progressing but remain at early deployment stages. Scaling these solutions requires a credible removals market and robust sustainability governance to ensure environmental integrity and real climate benefits.

What has changed in the past year

In the past year, abatement solutions gained momentum, but progress remains uneven. CCUS saw a wave of new project announcements, yet only a small share reached final investment decision, with most still reliant on subsidies or public funding. CDR gained policy traction, most notably with the EU’s proposed CDR certification framework, but large-scale deployment is minimal and costs remain high. Direct air capture (DAC) technologies are developing but remain energy-intensive and infrastructure-heavy.

Nature-based removals continue to attract investment, but concerns about permanence and integrity persist. Meanwhile, wood-based alternatives made tangible progress in construction and packaging, backed by bioeconomy strategies. Though still at limited scale, their potential is significant: with continued legislative support and technological improvements, emission reductions for instance in the EU could exceed 560 MtCO₂e per year by 2050.

CCUS saw a wave of new project announcements, yet only a small share reached final investment decision.

Outlook and key action points

Abatement must be scaled strategically, not as a substitute for substantial emissions reductions, but to address residual emissions that cannot be avoided. Clear policy frameworks, robust carbon accounting standards, and credible certification systems are essential to distinguish durable removals from short-lived offsets. Bio-based material solutions require sustainable biomass supply chains, innovation funding, and lifecycle impact assessments to ensure climate integrity. Abatement will not replace mitigation, but without it, net zero remains out of reach.

CCUS deployment must accelerate across full value chains, including CO₂ capture, transport, and storage. By 2050, Europe’s CO₂ pipeline network could span up to 20,000 km, requiring investments of over EUR 10 billion. Coordinated development of storage capacities, particularly in regions like Southern and Eastern Europe, can reduce the need for long-distance transport and lower overall costs. The emerging CO₂ storage market is drawing in oil and gas majors, offshore service providers, and new entrants securing key injection sites.

This transition is creating an entirely new value chain, from capture to permanent storage, along with the commercial models and support structures needed to make it viable. Few companies can manage this alone; setting up transport and storage is far from the core expertise of most high-emitting factories. Without clear access to storage and predictable CO₂ prices or removal credits, companies face major barriers to investing. While private momentum is building, public support, long-term infrastructure planning, and smart clustering of capture and storage hubs remain essential. Abatement solutions should be prioritised for hard-to-electrify sectors and integrated into broader transition strategies.